Orchestrating prosperity

Tax return gives a glimpse of earning power of L.A. Phil's Gustavo Dudamel.

When Gustavo Dudamel took over the Los Angeles Philharmonic's podium two years ago, he brought youthful dynamism and passion, a joyfully infectious presence and a coiffure that's one of classical music's most expressive heads of hair since Leonard Bernstein.

And how much do those qualities cost his employer? The orchestra's recently filed federal nonprofit tax return for 2009-10 affords a first glimpse, if a partial one, of the compensation arrangement, showing salary and benefits of $394,580 during the 2009 calendar year. But that includes just three months in his role as music director beginning that October, as well as pay for preparations and planning earlier in the year.

"It's not a typical year for him," said Arvind Manocha, the Phil's chief operating officer, cautioning that it would not be accurate to multiply the reported earnings by four and assume that Dudamel makes roughly $1.6 million a year. As for what the conductor earned in 2010, his first full year as music director, Manocha said, "we are not at liberty to say" before it's reported in the orchestra's 2010-11 tax return, which won't be made public for another year.

Earnings fluctuated for Dudamel's predecessor, Esa-Pekka Salonen, ranging in recent years from a high of $1,576,285 in 2005 to a low of $1,124,503 in 2006. The number of concerts a music director conducts can vary from season to season. Typically, the job is not exclusive: Often conductors, including Dudamel, serve as music directors for multiple orchestras or take guest-conducting engagements away from their home orchestra.

The Phil's president and chief executive, Deborah Borda, continued in 2009 to command one of the top pay packages among American arts managers. Including salary, bonus, retirement plan and benefits, her compensation came to $1,397,746 -- a $4,634 increase over 2008. Her average workweek is listed at 60 hours. (See the accompanying chart for earnings comparisons with other conductors and arts executives.)

The orchestra has prospered under Borda, going from thin ice to affluence. When she arrived in January 2000, the Phil was running chronic deficits and was borrowing from its endowment to meet operating expenses -- a recipe for disaster if continued too long.

Since then, ramped-up fundraising and improved earnings have pushed net assets from a paltry $7.3 million in Borda's first full year on the job to $134.7 million at the end of fiscal 2009-10.

In the three years before Borda took over, annual donations averaged $18.8 million, adjusted for inflation. In the 10 years after her arrival, they averaged $33.7 million. Concert revenues in 2009-10 reached a record $57.4 million -- up 40.7% in inflation-adjusted dollars from eight years earlier. Orchestra employees have reaped some of the benefits: Annual spending on staff and musicians, including benefits and payroll taxes, rose 29% in real dollars from 2001-02 to 2009-10.

Manocha said that resuming construction of the long-stalled Walt Disney Concert Hall in 2000 helped energize audiences and donors -- and that the momentum has been sustained. While many new arts venues see attendance slacken after the initial boost generated by their novelty, Manocha said that the draw for orchestral concerts in the 2,265-seat Disney Hall has held steady at 95% since it opened in 2003. Combined attendance at Disney Hall and the Phil's summer venue, the Hollywood Bowl, has totaled 1.15 million in each of the past two seasons, Manocha said, not counting rental engagements by outside promoters.

"We're fortunate to work in an environment where the audience is so supportive of what we do," he said.

The Phil's 2009-10 tax return reflects a full recovery from the recession. Improved investment earnings and a rebound in annual donations lifted net assets to nearly $10 million beyond the pre-recession peak. Giving totaled $38.5 million for the year, after having slipped to $23.4 million during the downturn, the lowest since Borda's first full year on the job. Spending growth had slowed to 1.6% in 2008-09, but accelerated at a 7.2% clip. The fiscal year brought new highs in revenues ($113.8 million) and spending ($96.9 million).

Although comparisons are inexact because few orchestras operate a large and busy summer venue such as the Bowl, the Phil's $96.9 million budget was larger than any of its peers, topping the runner-up Boston Symphony (which has a prominent summer stage, Tanglewood, and spent $83.7 million), the New York Philharmonic ($77.3 million) and San Francisco Symphony ($71.6 million).

The L.A. Phil's recovery from the recession contrasts with that of its leading peers. The 2009-10 tax returns for the New York, Boston and San Francisco orchestras and the Chicago Symphony show net assets $54 million to $77 million below their mid-2007 peaks.